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Russia temporarily restrict grain exports

Russia temporarily restrict grain exports, after the meeting of the Russian government with the Prime Minister Dmitry Medvedev. Immediately after the announcement of the news the price of one ton of wheat on the London Stock Exchange rose by 0.98% to 136.50 GBP.

“It is time to consider the introduction of administrative restrictions on grain exports. Prepare suggestions on how to do it. Of course, it must be properly in accordance with the leading exporters, the decision should be temporary”, said the Prime Minister Dmitry Medvedev to his deputies. In addition, according to Medvedev’s decision “should be enough to correct the situation on the grain market and to provide our citizens and bakery products in the processing of grain”.

“We have prepared a proposal for the introduction of export duties on grain, as later in the day, they will be presented to you”, said Deputy Prime Minister Dvorkovich. He said that the “law is violated in the transport of grain by road regularly monitor more than the permitted quantity transported”.

Earlier, Economy Minister Nikolai Fyodorov said that the ministry will take “drastic measures” to regulate the grain market. “If that does not result from the regulation of minimum prices will be necessary to reflect on other much more stringent measures”, the Economy Minister said.

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Chinese inflation slowed in November

The Chinese inflation slowed in November, which is another fact adding concerns for cooling in activity in the second largest economy in the world. The consumer price index increased by 1.4% on an annual basis with the slowest pace since November 2009. The figure is below the forecast of analysts for growth of 1.6% and the report 1.6% in October. On a monthly basis, the CPI fell by 0.2%. The experts predict that in November inflation will remain unchanged in October index also did not move.

The data justify the expectation of any delay. A few years ago everyone was talking about how China needs to re-balance its economy. And this is exactly what happens now. It will lead to slow growth, but, hopefully, to a qualitative growth. What we see now is not alarming. According to analysts the fears of deflation are overpriced. The slower growth in inflation is due to falling commodity prices globally, and this should have a positive impact on businesses and households.

The index of producer prices decreased for 33 consecutive month in November. The index is down with 2.7% yoy against forecasts for a decline of 2.4% and -2.2% recorded in October. Moreover the exports rose only by 4.7% yoy in November compared to 11.7% in October.

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UK trade deficit shrank in October

The UK trade deficit shrank more than expected in October to its lowest level since March as a result of the decline in fuel imports from outside the EU, according to the Office for National Statistics (ONS). The deficit in the overall trade balance of the kingdom fell to 2 billion USD in market forecasts of a retreat of 2.8 billion GBP. Last month was reported level of 2.4 billion GBP. According to experts from the ONS the contribution of net trade to GDP growth in the third quarter was negative - of 0.5% points. The revised data for October will lead to less negative contribution, but at this stage it is difficult to determine the exact dimensions. According to the data, exports of goods increased by 200 thousand GBP between September and October, mainly due to the rise in exports of silver.

“Unconfirmed data show that in this particular commodity. India is the main trading partner of the United Kingdom”, highlighted by the ONS.

The imports fell c 700 thousand GBP, reflecting the significant retreat in imports of fuels. However, the decline was offset by an increase in imports of machinery and transport equipment. The balance of trade in oil in October was a deficit of 800 million GBP from a deficit of 1.6 billion GBP in September.

British trade balance with countries outside the EU has granted 3.5 billion GBP in October - the lowest level since March. The exports to countries outside the EU has in turn increased by 100 million GBP. In its latest quarterly economic forecast British Chamber of Commerce said it expects slower growth at the end of 2014 due to lower exports. According to the business economy remains heavily dependent on domestic consumption.

“Our dependence on consumer spending and mortgages means that the UK economy is particularly sensitive to interest rates. All increases in short-term interest rates could pose a huge risk to our economy. It will also have an impact on important economic investment. Exports UK is unchanged and is crucial to reassess the global strategy of growth of exports of the country”, the report said.

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Greece rely on TAP and Southern Energy Corridor

SamarasGreece rely on TAP and Southern Energy Corridor, said the Deputy Prime Minister and Foreign Minister Evangelos Venizelos, in welcoming the participants in the Greek-Turkish business forum. The forum was attended businessmen from both countries, Greek ministers and the Turkish delegation led by Prime Minister Ahmet Davutoglu. According to Venizelos “it is extremely important to fully be realized joint projects such as the construction of TAP, which is an extension of the Trans-Anatolian gas pipeline (TANAP), and the creation of the Southern Energy Corridor, which opens a new page in relations between the two countries”.

“Moreover according to the recent events in connection with South Stream, both other projects receive additional essential dimension in terms of economic development, and international policy”, stressed Venizelos. “Turkey is a big country, a big market, a candidate country for EU membership, and Greece constant support Turkey’s European perspective, of course, subject to the conditions that are valid for each candidate country”, added Greek Deputy Prime Minister.

Venizelos stressed that “the key to accelerating the development of bilateral relations and the full normalization of Greek-Turkish relations represent Cyprus issue, respect for international law, especially international maritime law”.

For his part, Prime Minister of Greece Antonis Samaras said in his address to the forum participants that the significant strengthening of trade and business relations between Greece and Turkey in recent years has been mirrored by a sharp increase in the volume of bilateral trade.

“From 1.062 billion EUR in 2000, this volume reached 4.3 billion EUR in 2013″, said Samaras. “In particular, the last two years and the first eight months of 2014, Turkey was the first volume of Greek exports and occupied 15th place in terms of Greek imports. These figures speak for themselves”, said he said. The Prime Minister announced that Greek investments in Turkey are now reaching 6.6 billion EUR, covering a wide range industries, wrote Monday. “On the other hand, in recent years there has been significant investment by Turkish companies in Greece, mainly in the field of tourism infrastructure and manufacturing”, said Samaras.

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Standard & Poor’s downgraded credit rating of Italy

Standard & Poor’s downgraded credit rating of Italy with one level, due to concerns about slower growth and rising debt, keeping still good prospects of the country. The agency lowered its long- and short-term sovereign credit ratings of the third largest economy in the euro area at levels respectively of BBB- and A-3 from BBB and A-2. S&P adjusted its forecast for growth in gross domestic product (GDP) of the country. Expected average growth of the Italian economy for the years 2014-2017 is now in the range of 0.5% to 1.2% compared to the current 1.0% and 1.9%.

“Persistently low inflation and challenging business environment continue to weigh on the economic outlook of Italy”, said the agency.

The credit agency also amended and its assessment in respect of the Italian public debt, already provides for an increase of 80 billion EUR by the end of 2017, or 4.9% of the estimated 2014 GDP. The new assessment sent the Italian rating one step above non-investment grade. However, according to S&P maintaining the stable outlook does not threaten the loss of Rome in the speculative category in the short or medium term.

“The stable outlook reflects our expectation that the government will gradually implement a comprehensive and potentially growth-enhancing structural reforms and budget”, indicated by the agency.

The S&P added that they expect the policy of the European Central Bank to continue to support normalization of inflation in the euro area in the long term will affect positively and Italy.

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Bundesbank reduced forecast for German economic growth

Bundesbank reduced forecast for German economic growth and inflation in 2016, according to the new analysis showing the struggle of the Eurozone to increase consumer prices. The Frankfurt-based German Central Bank cut its forecast for inflation in 2014 to 0.9% compared to 1.1% according to the June forecast. The institution reduced its forecast for growth of real gross domestic product this year to 1.4% from 1.9%. Meanwhile the German economy is supported by consumer spending and record low unemployment, growth continues to be hampered by the uneven and fragile recovery of the euro area.

However, Bundesbank president Jens Weidmann is quite optimistic. In his words, there is a reasonable hope that the current phase of weakness is only temporary. Weidmann moved its optimistic forecast a generally good state of the German economy. “And it is not only positive for the internal situation, but also allows you to see the chances for foreign markets”, he said in the report.

According to Bundesbank the inflation will be 1.1% in 2015 and 1.8% in 2016. The German GDP is expected to expand by 1% in 2015. So far, expectations were for growth of 2%. According to the bank in 2016 the economy with grow by 1.6%. These expectations, however, do not reflect recent declines in oil prices, warn bankers.

“If crude oil prices remain at this low level for an extended period of time, economic growth in 2015 and 2016 may prove to be between 0.1 and 0.2 percentage points higher than forecast”, writes Jens Weidmann in the report.

Growth in consumer prices in the Eurozone slowed to 0.3% in November, which is five-year low and well below the ECB target for inflation of just under 2%. On Thursday, the ECB cut its forecasts for inflation and economic growth in the euro area by 2016. The risks for the region are deteriorating political relations with Russia after the European Union imposed sanctions against the country because of its involvement in the Ukrainian crisis.

Separate data from Germany point to a surprising growth in factory orders in October, which grew with 2.5% compared to the previous month. Orders in September recorded a revised growth of 1.1% (0.8% according to preliminary data).

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US employment remained under expectations

The private sector US employment remained under expectations in November according to the latest data of Automatic Data Processing (ADP) and Moody’s Analytics. New job positions reached 208,000 last month with expectations for an increase of 222,000. The ADP data last month you were revised up to an increase of 233,000 from the previous estimate of 230,000. Change in employment, measured by ADP, is the total number of unemployed who have found work in the last month. The index is a key condition for the labor market in the US.

According to the analysts the breakdown shows that employment growth in small businesses largely remained for the second consecutive month, reaching 101,000 after an increase of 103,000 in the previous month. The growth in the average business has slowed down to 65,000 from 122,000 in solid previous month.

Data have traditionally come two days before the government report on new jobs outside the agricultural sector. The market expects the statistics rose by 230,000 last month and the unemployment rate to remain unchanged at 5.8%.

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Australian economy grew with 0.3% in Q3 2014

Australian economy grew with 0.3% in Q3 2014, which is slower than expected pace of growth, as the declining level of public and private investment continued to weigh on the expansion of the economy. The growth of Australian gross domestic product (GDP) reached 0.3% in the third quarter from 0.5% in the previous three months, according to the National Bureau of Statistics. The median forecast of surveyed earlier analysts was for GDP growth of 0.7%.

Measured on an annual basis, the Australian economy grew by 2.7% in the three months to the end of September with expectations for expansion of 3.1%.

According the data the net exports added 0.8 percentage points to growth, while final consumption expenditure were responsible for 0.4 percentage points of economic expansion. Looking at the industry, the main growth factors were financial and insurance services, adding 0.2 percentage points. Information sector and telecommunications have they contributed 0.1 percentage points to GDP growth.

The data showed that real gross domestic income fell by 0.4% in the quarter to the end of September. The new figures support recent comments by central bankers that the economy will grow at a slower pace over the next few quarters, especially against the background of declining investment in the mining industry. On Tuesday, Australian central bank decided to keep its main interest rate a record low of 2.5% for the 16th consecutive month, and they were staff projections despite volatile economic data in recent weeks.

However, there are speculations that the institution will further reduce interest rates in the next two years to support the growth of the economy. Deutsche Bank recently changed its forecast, according creditor Australian authorities will probably shrink interest rates by 50 basis points to 2% by the end of 2016.

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Chinese services sector growth trend continue

The Chinese services sector growth trend continue and remained stable last month, according to recent government and private data due to strong economic activity in the fourth quarter. The Chinese non-productive PMI index rose to 53.9 points in November from 53.8 points a month earlier, staying again at the 50 points separating expansion from contraction. Similar sector PMI index, published a few hours earlier, showed a growth of up to 53 points in November from 52.9 points a month earlier.

The data came just weeks after Chinese central bank cut interest rates surprisingly for the first time in more than two years. The institution denied the move aims to support growth, although several key indicators of activity reported delay of the second largest economy in the world.

The analysts expect the last contraction of the interest by the Chinese central bank to help sustain demand in the short term. However, pressures on the economy is still in place and give rise to additional measures in relation to monetary and fiscal easing in the coming months.

According to the report the growth of new services accelerated to a 30-month high in November, however, largely been offset by more moderate expansion of employment and worsening price pressure.

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Chinese manufacturing activity fell to 8-month low

The Chinese manufacturing activity fell to 8-month low in November according to the latest government data, sparking a new debate on the prospects for the second largest economy in the world. The index of manufacturing activity declined to 50.3 points from 50.8 points in October. The level was the lowest since March and below the market forecast for a level of 50.5 points. Any result above 50 indicates expansion, while levels below that indicate a contraction in activity.

The slowdown in manufacturing activity continues to weigh on economic growth. The strong influence has the real estate sector, which together with the related activities are expected to constitute about 20% of total GDP. In recent quarters, he was pressured by oversupply and weakening demand. The figures released last month confirmed the weak market conditions in the sector. Prices of new homes fell in 69 of the 70 biggest Chinese cities in September.

Beijing authorities have taken steps to alleviate the market, including by loosening restrictions on mortgage and reduce interest rates for the first time in more than two years. However, economists fear that the market will continue to weigh on economic growth for years to come. In a recent analysis was stated that a major problem in the real estate sector, the growth of new buildings still outstrips demand. In their words, until this trend continues, Chinese economic growth will rise even as a result of cuts in interest rates.

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